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Right, these laws made sense 50-60 years ago, but now all the dealerships are established and Tesla as a new unproven company that has a comparative low volume
by surge 12y ago
Right, these laws made sense 50-60 years ago, but now all the dealerships are established and Tesla as a new unproven company that has a comparative low volume of sales can't simply get dealerships to sell their cars plus it may violate agreements with competing car companies that they also sale. In this case there is no established Tesla franchises that would lose, and Tesla can't simply just get dealers to start selling their cars . So basically these laws now serve little purpose except protecting dealers/manufacturers that sell combustion engines from new competition.
- msandford 12y agoIt would probably make sense to rewrite the laws to somehow say that car manufacturers can't compete with existing dealer franchises within a certain mile/population radius and can't revoke dealer franchises simply to open up new territory for themselves. But to say that no auto manufacturer can operate direct sales is silly since there are now new car companies being formed.
- mikkom 12y agoWhy would you need any kind of such laws in a free market?
- TheHypnotist 12y agoBecause they would easily put franchise dealers out of business.
- msandford 12y agoAlso because the franchises weren't sold with an expiration date so for the manufacturers to start selling direct might be some kind of a breach of contract. But it'd take FOREVER to play out in the courts, and made worse by the fact that it's a national thing so you might not be able to consolidate it all down to one case in one federal court. It might be 50 class action suits in 50 states with several different outcomes.
- TheHypnotist 12y agoYeah, I think the idea here is it would just be a nightmare for everyone. Also, dealer's employ lobbyists.
- a_c_s 12y agoIf dealers would all go out if business if they had to compete fairly, then doesn't that suggest they might not be providing customers with much value? While I do think market interventions are sometimes justified, in this case it seems we are protecting dealers for their own sake.
- TheHypnotist 12y agoIt wouldn't be competing "fairly" if they had to compete with the guys they buy their product from.
- avn2109 12y agoOops accidentally upvoted you. As somebody else mentioned above, Best Buy competes just fine with Apple while buying their products. So it's not impossible/unfair.
- TheHypnotist 12y agoThat would be a matter of convenience and a ton of other factors. You really are comparing two totally different things.
- mikkom 12y agoIf they can't compete without laws that protect then they disappear - that is how free market works.
- clarkmoody 12y agoThe only thing that makes economic sense is to remove all of these dealership-protection laws from the books and allow the free market to organize itself in the most efficient way possible. If that means that auto manufacturers continue to use dealerships, fine. But that model shouldn't be forced upon any good/service by legislation.